Getting your business through COVID-19
The past few weeks have been challenging for all of us as we are faced with the evolving COVID-19 epidemic. As a business owner, it can be easy to feel overwhelmed and unsure what you need to do first to ensure your business survives the challenging months ahead and be ready to thrive when the world inevitably returns to ‘normal’.
To help you navigate your way through, we have outlined below the 3 C’s for you to consider and implement immediately:
It has always been and will always be king and queen. Every business needs to be looking to conserve cash and build as larger a buffer as possible. Things to consider doing are:
- Know your break even point – how much cash do I need per week and per month to meet the essentials (rent, wages, super, insurance and loan repayments).
- Accounts Receivables – be vigilant on chasing outstanding invoices and follow up debtors as soon as they become overdue.
- Expense review – eliminate luxury and non-essential spending.
- Contact the bank – enquire about what they can do to help. It could be putting a freeze on repayments, providing new finance or extending existing facilities.
- ATO Payment Arrangements – seek arrangements on ATO liabilities to defer your BAS, IAS and income tax payments. It’s important that all lodgements are done and on time, especially considering these lodgements will be used in determining your eligibility and access to current and future government stimulus and incentives.
- Access government stimulus – the federal government has announced its first round of stimulus, with others to follow. State governments too have announced stimulus packages. Once full details have been released, look out for our emails providing a summary of what’s confirmed and read the links we provide to government fact sheets. (see Government Stimulus Package)
- Revise Budgets and Cash Flow Projections – I’m a big believer that every business needs a budget and cash flow projection. It documents your financial goals and highlights any potential cash flow issues. In times like these a revision is needed, as our assumptions and goals have changed.
With the way things are progressing, business premises may be forced to close, either by direction of government or because you have had a confirmed COVID-19 case. Either way, what are your plans to keep the wheels of business moving. Some things to consider:
- Do your systems allow you and your team to work from home?
- Does your team have the technology at home to work effectively?
- Do you need to deploy new systems to meet the work from home requirements?
- If the team does work from home, are your systems and theirs have appropriate security measures in place?
- For team members that won’t be able to work from home, what are the HR and employee leave implications.
Yesterday Fair Work updated their advice. It is very comprehensive and provides guidance on most, if not all issues concerning employees.
Communicate your COVID-19 Continuity Plan with your Team. Make sure your Team Leaders and Managers understand your plans and have them involved in the planning process.
Openly discuss reduced working hours with your Team (assuming this preserves cash) and working from home arrangements. Team members will be scared, so they need reassurance and they need to understand your plan to keep the business alive.
Proactively contact your customers to give them peace of mind that it’s “business as usual” where possible. Also important to contact your key suppliers to understand their plans and how they will affect your operations.
In times of uncertainty it’s important to maintain a high level of communication to your team and customers. You want to control the narrative of what is happening within the business and what your plans are for the future.
Lastly, talk to your business advisers and draw on their knowledge and expertise. We are here to help you through the tough times ahead and encourage you to keep in contact with us.